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Microsoft’s revenue gets a boost from hardware and cloud sales

Microsoft (NASDAQ:MSFT) posted its earnings for the fiscal year 2015 Q3 (3 months ending March), and posted a 6.5 percent year-over-year growth in revenues to $21.73 billion. Hardware and cloud sales boosted the revenue, including $1.4 billion from Nokia’s phone division.phonereveue

Though Lumia sales rose by 18 percent from last year, sales have dropped from 10 million to 8.6 million this quarter. Devices and consumer revenue grew by 8 percent to $8.95 billion. Microsoft posted 106 percent growth in commercial cloud services, which includes Office 365, Microsoft Azure platform, and Dynamics CRM. Microsoft’ increased focus on hardware, led to a 5 percent decline year-over-year to $6.6 billion.

Hardware revenues declined because of the lag in sales of Xbox One that is set to approach its anniversary of its launch. However, sale of tablets like Surface contributed to the revenue increase by 44 percent, when compared with last year’s $713 million. Nokia Devices and services unit was acquired by the company in the fourth quarter of fiscal 2014, and sold more than 8.6 million Lumia and 24.7 million non-Lumia phones. Though the sales is increasing gradually, Microsft’s move to decrease the pricing, caused a loss of $4 million.

Consumer Windows licensing revenues fell 22 percent and its OEM-Pro declines by 19 percent. The declines were caused by the transition of Windows XP though the launch of Windows 10 this year, is likely to boost revenues. Transition of consumers from Office consumer products and services to Office 365, caused a 41 percent decline. However, revenues are expected to grow with the rise in subscription business model.

One of the fastest growing divisions of Microsoft, cloud services and products revenue grew by 10 percent by a 25 percent growth in Microsoft SQL server. Cloud revenue posted $6.3 billion, and the company posted that it was encouraged by the continual growth of the division. Online services division also showed signs of growth as advertising revenue grew by 22 percent, and Bing US search market share rose by 20 percent.

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About Anirudh Madhav

A movie buff, a bookworm, and a compulsive doodler. All posts by Anirudh

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